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by 9/14/2000 3:13 PM
Stocks quoted in this article:
Internet infrastructure giant Juniper Networks (JNPR 206-9/16) received a vote of confidence from the options pit today. It appears that a spread trade was initiated using the September 150 call and the October 210 call. Each contract saw a 3,000-contract block cross the tape, with the September contract transacting at 39 and the October 210 call trading at 21.75. With open interest of 6,149 contracts on the September call and 1,288 contracts on the back-month call, it appears that the investor rolled the positions up and out, moving out one month and up several strikes.

JNPR gapped up 5-13/16 points at the open today on the heels of an anti-inflationary Producer Price Index. The shares have regained possession of their 10-day moving average, a trendline that has often served as support on short-term advances.
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by 9/14/2000 2:59 PM
Stocks quoted in this article:
The Labor Department reported today that U.S. jobless claims increased by 13,000 in the week ending September 9. Initial unemployment claims for the week totaled 324,000, the highest such level in 21 months. Today's increase was considerably ahead of an expected rise of only 4,000. The four-week average moved up to 318,500, also its highest level in 21 months.

In theory, tight labor markets cause demand to outpace supply, contributing to inflationary pressures. However, higher unemployment rolls may not be seen as a negative if it eases tightness in the labor markets. In fact, it may comfort market participants to know that labor-market tightness has been easing for five months.
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by 9/14/2000 2:28 PM
Stocks quoted in this article:
An earlier Market Observation discussed the recent weakness displayed by McDonald's (MCD 26-11/16), which has lost over 40 percent since November. This decline has further accelerated today, as the shares have given up over six percent to record a new 32-month low at 26-3/8.

Last night, the company announced that its earnings per share for 2000 could be negatively affected by as much as seven cents per share due to currency fluctuations abroad.

In response, Bear Stearns reduced its year 2000 earnings expectation for the company by three cents per share to $1.48. Additionally, the equity was downgraded at J.P. Morgan and Bank of America.

On the options front, today's most-active MCD options are the October 30 call and the October 25 put. Just over 1,500 contracts have traded on the call option, while about 1,200 contracts have changed hands on the back-month put. Open interest at these strikes heading into today stood at 2,843 and 212 contracts, respectively.
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by 9/14/2000 2:12 PM
Stocks quoted in this article:
The Commerce Department announced August retail sales numbers today, and the results confirm that the economy seems to be slowing somewhat. August retail sales were higher by 0.2 percent, lower than analysts' expectations of a 0.4-percent rise. Excluding auto sales, which sometimes skew results, retail sales rose by 0.3 percent. July's retail sales figure was adjusted upward from a 0.7-percent increase to a 0.9-percent rise. The year-over-year figures show the robust spending that has fueled the U.S. economy's strong growth. From August 1999 to August 2000, retail sales are up 7.0 percent. Excluding automobile sales, year-over-year sales are up a robust 8.3 percent.<
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by 9/14/2000 12:55 PM
Stocks quoted in this article:
Fatbrain.com (FATB 3-7/8) is an online retailer of books geared toward the science and information technology audiences. The shares have fallen sharply throughout the year, dropping over 90 percent since their late-November peak at 42-1/4. Last night, the company reported a second-quarter loss of 74 cents per share, substantially wider than the company's 1999 loss of 52 cents.

Also last night, it hit the wires that Barnesandnoble.com (BNBN 4-3/4) will be purchasing the beleaguered FATB for $4.25 per share in stock and cash, or a total of $64 million. FATB is trading more than 12 percent lower this afternoon, while BNBN is enjoying a 7.8-percent gain.
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